Ep.152: Chuck Smith, Dixie Elixirs

Ep.152: Chuck Smith, Dixie Elixirs

Chuck Smith of Dixie Elixirs is the guy who puts Dixie into Dixie Elixirs. As you might remember from Episode 148 with Gen Murray, Seth was in the Dixie Elixirs offices at the time. That’s because Seth was meant to meet Chuck at the office that day- unfortunately his plane was canceled and Chuck had this conversation with Seth in Chuck’s office, and Chuck in Alabama…hence the Dixie reference and moniker. Either way, you get a nice behind the scenes of the top of the Dixie Brands machine.

Transcript:

Speaker 2: Chuck Smith is the guy who puts Dixie Dixie elixirs welcomed into cannabis economy. I'm your host Seth Adler. Check us out on this social networks with the handle can economy that's two ends and the word economy and if you're so inclined to very much appreciate you filling out our new survey and survey.Libsyn.com/can economy, as you might remember from episode one, 40 eight with jen. Hurry. I was in the Dixie elixirs offices at the time. That's because I was meant to meet Chuck at the office that day. Unfortunately his plane was canceled and we had this conversation with me in his office and him and Alabama and the Dixon reference and Monica. Either way, Chuck Smith.

Speaker 1: Okay. So like two ships passing in the night. Chuck Smith from Dixie elixirs. It's good to at least be talking to you. Right.

Speaker 3: Well, it's good to be talking to you as well. Seth. I apologize for not being there in person, but mother nature took over this uh, this weekend. So a little delayed on my flights.

Speaker 1: Indeed. And what's interesting is I'm in your office, you know,

Speaker 3: I know would really be interesting if we were skyping that I could watch you sitting at my desk talking to me while I'm sitting here in Tuscaloosa, Alabama.

Speaker 1: Alright. So now that, that's the first question, why are you in Tuscaloosa, Alabama? How much can you share with us?

Speaker 3: Oh, I get share everything. Roll tide for all those fans that are listening. I, uh, my daughter goes to University of Alabama, she's a sophomore here. My wife and I love coming to visit her and coming to the games. So we have a little condominium just off a university boulevard and we come out to a dinner to spend some time here. So this was a spring parents weekend and we came out to see her.

Speaker 1: Fantastic. Okay. And does that, when you say roll tide, does that mean that you also are an alum? I am

Speaker 3: not actually. So I'm a, I call myself an investor. Some people would call me a homer. Uh, I actually went to vanderbilt, so I do have some sec blood in me. But uh, I lived, uh, uh, before my wife and now and then with my wife, lived in Alabama for about 12 years down at a place called fairhope, Alabama near the beach. And then when Brenda and I got together,

Speaker 1: her daughter was going to pick a school and we convinced her to come to University of Alabama. So I have become a big fan. All right, so now, now we're kind of starting to peel back the layers here and we're starting to realize where the Dixie and Dixie elixirs come from. Well, it certainly has its origin in the south, that's for sure. I had a real estate development company down here on the Gulf coast. There's still do actually.

Speaker 3: And about, uh,

Speaker 1: 12 years ago, maybe a little bit shorter than that, about 10 years ago, trip Kieber, uh, my business partner joined me as a partner in the real estate company. And then from there we uh, founded dixie about seven years ago. Okay. So there, there you have it, you know, we obviously we've spoken a trip and Joe and we've done the tour here and I say you and I are like two ships passing in the night because I know Dixie elixirs and these guys for years yet you and I still have not crossed paths.

Speaker 2: Chuck Smith is the guy who puts Dixie Dixie elixirs welcomed into cannabis economy. I'm your host Seth Adler. Check us out on this social networks with the handle can economy that's two ends and the word economy and if you're so inclined to very much appreciate you filling out our new survey and survey.Libsyn.com/can economy, as you might remember from episode one, 40 eight with jen. Hurry. I was in the Dixie elixirs offices at the time. That's because I was meant to meet Chuck at the office that day. Unfortunately his plane was canceled and we had this conversation with me in his office and him and Alabama and the Dixon reference and Monica. Either way, Chuck Smith.

Speaker 1: Okay. So like two ships passing in the night. Chuck Smith from Dixie elixirs. It's good to at least be talking to you. Right.

Speaker 3: Well, it's good to be talking to you as well. Seth. I apologize for not being there in person, but mother nature took over this uh, this weekend. So a little delayed on my flights.

Speaker 1: Indeed. And what's interesting is I'm in your office, you know,

Speaker 3: I know would really be interesting if we were skyping that I could watch you sitting at my desk talking to me while I'm sitting here in Tuscaloosa, Alabama.

Speaker 1: Alright. So now that, that's the first question, why are you in Tuscaloosa, Alabama? How much can you share with us?

Speaker 3: Oh, I get share everything. Roll tide for all those fans that are listening. I, uh, my daughter goes to University of Alabama, she's a sophomore here. My wife and I love coming to visit her and coming to the games. So we have a little condominium just off a university boulevard and we come out to a dinner to spend some time here. So this was a spring parents weekend and we came out to see her.

Speaker 1: Fantastic. Okay. And does that, when you say roll tide, does that mean that you also are an alum? I am

Speaker 3: not actually. So I'm a, I call myself an investor. Some people would call me a homer. Uh, I actually went to vanderbilt, so I do have some sec blood in me. But uh, I lived, uh, uh, before my wife and now and then with my wife, lived in Alabama for about 12 years down at a place called fairhope, Alabama near the beach. And then when Brenda and I got together,

Speaker 1: her daughter was going to pick a school and we convinced her to come to University of Alabama. So I have become a big fan. All right, so now, now we're kind of starting to peel back the layers here and we're starting to realize where the Dixie and Dixie elixirs come from. Well, it certainly has its origin in the south, that's for sure. I had a real estate development company down here on the Gulf coast. There's still do actually.

Speaker 3: And about, uh,

Speaker 1: 12 years ago, maybe a little bit shorter than that, about 10 years ago, trip Kieber, uh, my business partner joined me as a partner in the real estate company. And then from there we uh, founded dixie about seven years ago. Okay. So there, there you have it, you know, we obviously we've spoken a trip and Joe and we've done the tour here and I say you and I are like two ships passing in the night because I know Dixie elixirs and these guys for years yet you and I still have not crossed paths.

Speaker 3: Well I don't think we have, I've since I started the company with trips seven years ago. I tried to stay in the background. I was kind of the wizard of Oz behind the curtain. Um, he's a, he's a good front of the house guy and I'm a good back of the house guy. So until recently I've split my time between Alabama and my real estate company and Denver. Uh, but then as of September this past September, Brenda and I moved full time to Denver just because travel was getting too much and I really needed to spend more of my time, uh, at Dixie HQ.

Speaker 1: Yeah, there you go. And that brings us up to date. So then let's go all the way back to the beginning. If you went to vanderbilt, where, where did you grow up? Where were you born and raised?

Speaker 3: Well, I grew up in Baltimore, Maryland, and uh, I went to university of Maryland after graduating. From there I went directly to vanderbilt for graduate school.

Speaker 1: Okay. And so you know who boog Powell is?

Speaker 3: Oh, of course. I know who boog Powell is. I actually watched him as I was a kid. I'm at old memorial stadium, moved pal and Brooks Robinson and, and all of that. A famous crew from the Baltimore Orioles. How do you know?

Speaker 1: Well, I'm a baseball historian on the side and uh, that. No, that was a great team, you know, boot obviously a big power hitter at first base. Brooks Robinson, arguably the best defensive third basement of all time. And then you had your four starting pitchers. Well you will, you did. And if we're going to have trivia, who was, uh, who was the shortstop right next to Mr Robinson during that time. So it was not cal ripkin it was not. I'm going to, uh, yeah. First name was mark a mark. Bellhorn is not correct. I'm going to guess mini Minoza even though I know that that's wrong. Mark Butler, mark verlander. Oh, that's what I would like did. Actually, that's in there somewhere. Who would believe me? I just got it wrong anyway. All right. So you obviously, uh, a baseball fan growing up. Were you into sports as well as that was your thing?

Speaker 3: A little bit. Not a whole lot played soccer. Um, but, uh, really just when I got to school after I was through all of my, a youthful indiscretions of partying at University of Maryland, I really got more into the academics and business focus and hence why I went directly to vanderbilt to kind of get on my way with, uh, with Mike

Speaker 1: career. Right. And we don't want to let you out of Baltimore or Maryland just yet because it's the youthful indiscretions that really inform us. Um, you know, yes. Everybody, uh, as a young person, you know, supposed to go wild a little bit. Um, your parents though, what kind of, you know, what kind, what kind of value system, what kind of more raised did they instill in you before you went to be a Turk at the University of Maryland?

Speaker 3: Well, I have to say my dad was a pretty hard working guy and he built his own company, but as a result, he and I probably didn't have as close of a relationship is pretty focused on business. My mother on turn though really was a big supporter of mine and, and uh, we did a lot of things together, but, um, I think, you know, my parents in general just instilled in me a, a good strong work ethic and, and kind of, they didn't call me a whole lot, so I had to pretty much make my own way. I'm an only child. So, contrary to popular belief, not all, only children are a terribly spoiled,

Speaker 3: Well, you know, you kind of have to pull yourself up by your bootstraps sometimes, but I have to say my parents gave me a, gave me a good solid, uh, upbringing and I didn't really one for a whole lot of things. Frankly, they, uh, they provided a good home and, and, you know, thank goodness both of them are still alive. My Dad turns 90 in about three weeks and my mother is a 82 and they're both living together and fiercely independent.

Speaker 1: That is fantastic. That's great. What kind of. Yeah, so you at least did well enough at the University of Maryland. You admitted that you were kind of having fun, but you at least did well enough to, to go to vanderbilt. What was your major in in Maryland?

Speaker 3: Well, I actually started of all things in a, in, in premed, veterinary medicine. I wanted to be a vet. I had kind of worked for several years at a veterinary hospital, really kind of had that band and then I realized that, uh, organic chemistry was not my thing and uh, or maybe just studying for organic chemistry was not my thing. I'm moved into more of a business background, got my degree in accounting and then a new. I really didn't want to be an accountant so I've met or I went directly to vanderbilt and got my Mba.

Speaker 1: So yeah. So you, you kind of that inflection point, it does sound like there's a difference and that there was a moment or at least you know, a moment in time where you said, okay, time to buckle down, time to get real it. Was there an epiphany?

Speaker 3: Was there something that happened or was it just, okay, I guess I graduated now it's time to get down to business or was there something more there? I think just the ability to steer my self in the mirror and said I didn't want to be a ditch digger, so you know, as a, as I was going through Maryland and I did kind of get through sort of a fun time of my life and I realized that I didn't need to buckle down and frankly did very well in school at Maryland when I finished up with my degree in accounting. So it kind of turned it around pretty quickly. And I also knew that I really needed. If I was going to go to graduate school, I need to get it done because otherwise I would have probably gone out to the workforce and, and I'm not going back to school because I would have been more interested in working so.

Speaker 3: Right, exactly. Well, once you start to make money, it's tough to then go back to school and make no money. Well, and because when you started to make money, you start to spend money stuff. And so then it's a vicious cycle right there. That's exactly right. Uh, so that, that's the nature of commerce. But uh, as far as the MBA, how did you find vanderbilt? It kind of seems like it's not on the map if you're originally from Baltimore, right? Well, it isn't, but I'll say it's the Harvard of the south. So we'll, uh, I don't know if I need to pump it up more than it is. I was really pleased and blessed to go there. I had offers from a couple different schools that were also extremely highly regarded, but vanderbilt just sort of fit a fit. Me, um, they, they were interested in me attending the school and they made that known and so they Kinda, I guess they would meet as much as I was interested in going to them. There you go. Nice to be wanted. It doesn't happen often.

Speaker 3: Well, for guys that look like you and me, right. You know, I have a face for radio, which is why we're doing this on a podcast. That's exactly it. That's both of us. So, uh, as far as the, you know, the Mba, did you have a concentration, a specific concentration? Did you know what you wanted to do directly after, uh, you know, kind of graduating from vanderbilt? Uh, I, um, I had a concentration in finance and I thought that I wanted to go into management consulting and in fact that was one of the reasons why I went to vanderbilt because a gentleman named Bruce Henderson was on staff there and Bruce founded a company called the Boston consulting group, which was one of the preeminent consulting organization. So kind of alongside Mckinsey and Booz Allen. So I was kind of interested in doing that. Um, but then as I got through those two years, uh, I, I really just found myself going into an opportunity in corporate America and I'm a small more entrepreneurial even at that time, but I'm more of a corporate focus as opposed to a consulting focus and that kind got me on my way.

Speaker 3: What was that corporate focus? Where were you when he came out? Uh, I went to Chicago and became the CFO of a chain of a high end women's clothing stores. It was a, it was a small chain in Chicago that we then grew to a larger one before we sold it.

Speaker 1: Look at that. All right. So you're just fresh out of, you know, getting your Mba and they place you as a cfo right away. How many, how many stores was it? He said small chain. How many stores? It,

Speaker 3: we had three, but those three did a close to $15,000,000 for the business. And then we added two more during the time that I actually ran the company for about a year and a half before I sold it. I was fortunate to know the owner of the stores are very, I didn't know him personally, but I knew his cfo and they recommended he recommended me for the job and after interviewing I got it. So that's sort of how I got into it.

Speaker 1: All right, so the door was open just a bit and then you nudged it, the rest of the labs and after that interview. Absolutely. Yeah. Well I would like to say I had something to do with it, but yeah, I, I, I pushed through, that's for sure. That's what I'm saying. Yeah. No, no, they only open to the crack for you. And then you, you, uh, you did the rest. This couldn't have been about your knowledge of women's clothing, chuck, but don't let the judge. Well, I, uh, there's lots of stories on that, but we're not going to talk about those on a, on this, on this, uh, recording. Fair enough. But what I mean, you know, in terms of a business, you know, what I like to say is that the cannabis industry, it's an industry that surrounds what happens to be a plan. It happens to be kind of, as that happens to, you know, medical benefits that happens to have other benefits as well. A women's clothing, you know, it's the same type of commodity. It's unnecessary. Commodity doesn't necessarily have medical benefits, uh, you know, but as far as moving a product for an audience, what did you learn from that first, you know, first job out of school?

Speaker 3: No, I'm not sure. Look, everything that we do in our life, it becomes just sort of the building blocks on who we, who we eventually become and the experiences we use for the, for the next opportunity. And so I would look back at everything that I've done and I've done quite a few and varied things to before we got into, into Dixie, but all of those are just the building blocks to try and build a business. I think that very first job probably taught me a lot about just, you know, personal responsibility, um, management techniques because I'd never managed anyone before. I certainly had a good strong financial background from an educational perspective, but it gave me a real world. Have a viewpoint on, on how to apply kind of that book knowledge into, into a, a day to day operations and how to build that. And, and I say also, you know, I was fortunate enough to be thrust into a pretty important job quickly so I had to grow up fast and I think that, you know, that more than anything probably is what I took away from that.

Speaker 3: Yeah, no installed right at the top, right from the get go. How many years were you there? And then what was the next step? He always there for a little over three years. About three and a half years. Um, again, the first year and a half. A really kind of getting the financial and accounting structure in order and, and putting in installing technology for the store's inventory control and point of sales systems and things like that that the company was behind him. So I had a key hand and in selecting and implementing those things and that actually. And then I, I took over the company for about a year and a half. I'm actually traveled between New York and Chicago to work with the buyers, work with a buying office, really trying to build out not only the two new stores but build out our merchandising line. So I really learned a lot about that in a short period of time.

Speaker 3: But what I learned there more than anything is that I didn't know a thing about merchandising. I didn't know a thing really about fashion. And so I needed to surround myself with people that did and I think I've tried to do that in my entire career. I'm not try to be an expert in, in something, but to find people that are and build a team and help manage them to be successful. And I think that's what we did at that company. No, absolutely. So, uh, you know, going back and forth from New York to Chicago, building up the frequent flyer miles, that's fantastic. Uh, getting to know, you know, how to build a team. Where did you go after that? Uh, you know, after that first. Sure. So when we sold the company, I basically sold myself out of a job and I called the software company that I had done this work with, that we had selected the systems and we'd done implementation within all of our stores, just really to tell them that, you know, we had about a four to six month window left in our relationship and within 24 hours the two principals of the company, which is a pretty large software company out of Toronto, Canada, called me and offered me a job and they wanted me to basically build their apparel and manufacturing and retail vertical market for their software business.

Speaker 3: So I, um, I did that, actually moved to New York for about a year and two months. And then from there they promoted me to a regional vice president in San Francisco running the whole west coast operations for the company. So I moved from New York to San Francisco and took over that business. Fantastic. And again, you're, you're proving A. I think we're both making the same point, which is a, whether it's women's clothing, a software or cannabis, you know, it's, it's, it's running a business is what it is. Now, as a New Yorker, I have to ask you, where did you live in New York? I had the sweetest deal chef. So let me just tell you the, um, this also goes maybe to learning negotiation skills. So I didn't immediately say yes, I'll move to New York. I negotiated a, my, my entrance package, if you will. So I had a one bedroom apartment on west 57th between 10th and 11th, a Doorman, um, run a apartment building that was entirely paid for by the company for a year.

Speaker 3: Ah, ah. So that is. So, that was a good deal. That is how you live in New York, my friend. You could, uh, you could have a party or two in, in a place like that, right? Yeah. I had a lot of, uh, of my friends that graduated from Vanderbilt. We're living in New York and uh, somehow they always showed up on happy hour on my tab so that, which was fine by me. What now? What years? Because you said 57th street, right? Yes. West 57th. Yeah. So I mean, uh, so here's. Was this a long time ago? Uh, Jeez. Now you're asking me to date myself and I get to go back and think about what that was. It was like in 91. Ninety two, right around there. 90. That's not that long ago. Long time ago. That's not that long ago. What a w, w what kind of did you get out to, to, to any of the scene at all?

Speaker 3: Or was everything kind of happening at your house? I did get out to the scene, but I have to tell you, I have, I have great but blurry memories of all that. Um, that's a, that's what you're supposed to have. Yeah, exactly. I also work quite a bit, so I have to be honest. The, uh, the, the, the apartment was more of a convenience of a place to hang my hat because I traveled a lot and worked a lot. So, but it was a fun time. Well that's it and I was happy to do it. And you don't get to uh, I guess the next rung up in San Francisco without working hard. Where, where were you in San Francisco? So I took over this, uh, this branch office or regional office which was just south of the city, a real close to the airport. That's where the office was located.

Speaker 3: Actually the first office, cause we, we built a bigger office but the first one was right next to candlestick park. And uh, I remember being in our office when the earthquake, the big earthquake hit and a world series during the world series. Exactly. We were big tailgate parties going on in our, in our parking lot, just below our office windows. And we are going to wander down there and party with a few of the folks. And before heading out I didn't have tickets to the game that particular day. And then the earthquake hit. And then all hell broke loose. So quite literally. What a, uh, what was the effect on you, you know, because that was a big one.

Speaker 3: Yeah, it was a, it was a scary time. I, I had a girlfriend at the time who we were living together and she went missing for about 12 hours just because her cell phone was done and she didn't, she wasn't in the city, she was down in the peninsula a, everything was fine, but it took us quite a while to reconnect and uh, getting into the city, I'll never forget that we had a balcony that kind of over in Pacific Heights area or that's where we lived. And our balcony overlooked the city and it was, it was kind of like, um, you know, what you envisioned bay route during the war was because it was just fires and smoke and no street lights and uh, in the no lights at all because electricity was out and lots of sirens. And it was a scary time for, for sure.

Speaker 1: Hmm. Well, uh, I'm glad to hear that everybody made it through it. And you said you knew as far as, you know, just kind of asking the cannabis question here, you know, you're in the bay area. There was, at that time, obviously a cannabis community and, and, uh, even, uh, a burgeoning cannabis industry. Did your kind of life a intersect with that in any way at that point or. No,

Speaker 3: it really didn't. And that's a good question. You know, I've reflected back, you know, my, my real relationship with cannabis was during the time that I was at University of Maryland and maybe just slightly, uh, during the time I was at vanderbilt, but not really, it was mainly University of Maryland and maybe as a younger person growing up and I, and I had very, very little to no relationship with, uh, with the plant, if you will, after that, until, you know, getting into this business now seven years ago.

Speaker 1: Alright. So as far as a software, let's leave that behind is, did you jump from software directly to real estate or was there another, uh, step in? Yeah,

Speaker 3: I did. It was actually with a couple of different software companies during the time I was at, uh, in living full time in San Francisco. I lived in the city, uh, got married, got divorced, um, lived in Sausalito and actually if any of my friends are listening they would say tell the truth. So I got married, got divorced, then got married again and then got divorced. Um, uh, so, so for the record, um, but lived in, lived in Sausalito, a really worked in the software industry and then sort of semi retired and partnered up with A. I actually partnered up with a guy and built a alcoholic beverage company which was really fun. Launched a, launched a brand, launched a product, got pretty good distribution. Uh, then I sold out my part of the part of the business to him and sort of was sitting on the beach for a few months and then partnered up with, with another friend of mine from Colorado who had a real estate company and he needed someone to help him with some development work he was doing down on the Gulf coast.

Speaker 3: Again, I didn't really know much about developing anything from a real estate perspective, but I did no business and I did know team building and I didn't know marketing and selling and building a brand and so I agreed to to go down and help him sort of reposition this company. And that was in Destin, Florida. So I was traveling back and forth from San Francisco to destin trying to kind of get this thing set up, a forum for, for my friend. And our friend was not trip. It was not. No, it was not. It was another acquaintance of mine. Uh, the trip just happened to meet several years later after we, uh, after we got together, my buddy and I got together and during that period of time I actually, before trip I decided to start a real estate company with a Jake, my friend and we, um, uh, so I, he was here in Denver or are there in Denver and I was, uh, on the Gulf coast.

Speaker 3: And so I built this little real estate development company and started doing some additional projects and that's the time that trip joined us. We needed someone to come in and help raise some money, uh, with us and he was looking to get into the business and looking to bring his good extensive set of contacts together. So Jake and I brought him in as a partner. How did that, uh, you know, was that a chance encounter? Who knew who, how did that all happen? I didn't know trip from a Adam, he knew jake through being, you know, around town and was interested in getting involved. Again, trip has a, a good Rolodex and uh, and obviously a good uh, uh, business development ability and gift of Gab, if you will. And so jake thought he'd be very valuable and helpful to us. Um, and he informed me over the phone that we had a new business partner, so I was the minority partner of the two of us have, between Jake and I. So I didn't have a whole lot of a thing to say about it other than great.

Speaker 3: If he can help send them down here and let's get it, get after it. And so that's what happened. All right. And so then let's just go ahead and fast forward through real estate with trip too. I would imagine it would have been tripped proposing to you that there might be a cannabis thing here. Right? Well it was, um, but ironically, his proposal isn't a thing we ended up doing. He called me up and said that, uh, we were, that he was interested in maybe getting part of the green rush and some people had approached him about investing in a cultivation and trip. And I, since the backing up to the real estate would, what happened as we were going through and building the business, I decided I was really much better friends with Jake than I was business partner. And so trip and I and in a fundraising mode ended up raising enough money to buy j dot out of the business.

Speaker 3: And with that we then split the new company 50 slash 50. And from that point on, everything we've done has always been 50 slash 50. We've always, uh, uh, got into new businesses are invested in businesses and, and been equal partners. So regardless of who had what role, that's just the way that we've executed our, our business and personal relationship. So, uh, with that, he called me up and said someone's interested in promoting a cultivation and maybe we should look at investing at it in it. And I was interested, I mean, I really, to me it was just, you know, another thing to, to explore. Uh, but at that same time I was approached by someone that knew of a, a, a group of folks, a small group of folks that happened to be from the south and they were in Colorado creating some products and they needed some help.

Speaker 3: And with that we looked at that and really decided that was a better place for us to invest our money because it was something that we didn't know anything about cultivation. And that seemed to be kind of risky, not to. The whole industry wasn't risky, but that seemed to be on the tip of the spear. Risky. So more directly risky. Yeah, exactly. And, and also risky from the lack of knowledge, the risky from the lack of being able to control that plant. And some of the things that could happen to it environmentally. So it was a lot of things that you couldn't get your arms around. But building this consumer product type company and building a brand was something that we thought we had much better opportunity to do. And you know, very quickly we just, uh, decided to, to invest in the company and, and um, you know, by the folks out that were in there and, and take the company over and build it.

Speaker 1: And from that moment, I mean, you guys have been, you know, on a kind of a hockey stick trajectory, uh, it is that, you know, what the original intention was. And is that the original path that was being tread or were there a little bit of rocky times to begin with?

Speaker 3: Well, there's always rocky times in any business and certainly cannabis is fraught with peril. It's not for the faint of heart, that's for sure. So we've, you know, we've, we've stared at each other and stare into the abyss a couple times in this industry. But from day one we knew that we had an opportunity to build a brand. And in fact, you know, we talk often about sitting in a, in one of our modest little offices,

Speaker 4: uh, early days with a whiteboard and we put up on the whiteboard, you know, alcohol, tobacco and Pharma, and then next to it, you know, brand and brand foundation. And so we always knew that if we built a good company with a good brand and a good team to execute that brand, that there would probably be somebody that we ultimately could sell to. And have you got in early days, we probably looked at the exit being quicker than, than, than we do now. Now we don't really have any interest in selling. We have an interest in building not only the company but building the industry. And I think that's what you see when you look at Dixie and its legacy. So far we've tried to be very transparent. We've tried to really be model citizens in the industry. I think that's why we have a lot of respect paid to us by all levels of the industry. Whether it's people in the industry or law enforcement or regulators or legislators. Uh, I think they know that Dixie is a company that does it right from top to bottom and, and we're proud of that.

Speaker 1: Yeah. So I want to do a little bit of jumping around here because that is something, you know, you mentioned a point where I had already been talking to two trips, so trips on in our first conversations when I started doing research in the space in 2013 was very much still talking about, you know, ultimately we're going to sell out and that's going to be great and everything's gonna be fine. And along the way from 2013 to now, it really has changed. The goals have changed. Um, what was it, do you think that that happened for a, for you and for the brand, uh, to, to kind of change that, you know, initial goal.

Speaker 4: Well, I think you go through a big arc of, of emotions during something like this, you know, and part of it is from a business perspective and part of it is purely an emotional and mental perspective. You know, we could have never guessed when we started this company, the true power of the plant, we'd heard anecdotal stories and so forth, but we really didn't have a good understanding of. And I don't think in the early days not many people did a, but as more people had access to cannabis and more people had access to, to Canada dolls and you saw the, the evidence coming from, you know, children with dravet syndrome or veterans with PTSD getting off of opiates and alcohol, uh, with people that, you know, I'm familiar with from all ages that, uh, that, that use cannabis, all legal ages that use cannabis for pain management.

Speaker 4: You know, suddenly that start getting the profound effect that, hey, we're doing something here other than just trying to make a buck. But on the financial side, we also knew that we had something. We knew that we had a great team, that we were building a, we built a great brand that was getting a lot of traction and we're really innovating. And, and then we wrapped all that up with, hey, how many times in someone's life do you have a chance to end prohibition like once, maybe in someone's life, do you have a chance to do, uh, to do something so transformative and so now you get kind of excited about that because we wouldn't even mind being, you know, part of that.

Speaker 1: Yeah. And here's where I do want to bifurcate. So, you know, I spent the first part of the, of this conversation making sure that you and I were on the same page that, uh, if it's women's clothing or software or cannabis building a company, building a team that's all the same. But here we are. You just said it, you know, ending prohibition. This plant has something special. Um, your, I can hear it. You're saying it, that your opinion of the product has changed as you've been working with it

Speaker 4: 100 percent. And you know, again, I've never been a big user of cannabis. It just, you know, I'd rather drink wine frankly, but I do enjoy our products. Um, and I do think they have a great place in, in the consumer or the patients, um, a portfolio, whether it's a low dose product, which we were one of the first to innovate and bring that out in a very responsible way, um, or you know, if it's a, if it's a, a very recreational and fun product, I'm like, you know, like our, our chocolate bars. I think that the product portfolio spans a whole broad range of consumers and so I know that they're a great substitute for alcohol frankly. Um, most of people's bad decisions were probably made on alcohol or other hard drugs and I think marijuana has a very, a very good place, um, as an alternative to that.

Speaker 1: Okay. Alright. So you know, so there you are, there's the plant, here's the business. Let's go back to the personalities of hand trip specifically starting to show up on things like 60 minutes. So how a happy was a guy like you who had no interest in that at the time, to have somebody like trip to do all that?

Speaker 4: Well, I would say that I was as happy about that as he was as happy to have a guy me that could balance a checkbook. There you go. Exactly. So, uh, and, and so we've always had a very complimentary relationship that way. Um, you know, the other way to say it as you know, uh, he's the front of the House on the back of the house. He's the guy that makes the rain. I'm the guy that tries to catch it. Um, that's, you know, just the way we operate. And, and also, you know, I wasn't allowed because I was not a state resident to participate really in, um, in our business, certainly from a financial perspective, I wasn't allowed to have ownership or you know, be a, be an active participant in the company in Colorado initially because I wasn't a resident and that was a requirement.

Speaker 4: So I worked for free. Um, now of course I worked running our other real estate company, but I participated extensively in building the business and being part of the decision making process, but I couldn't get paid. Uh, so, so I was always really more behind the scenes because I just didn't have, um, you know, legally I wasn't allowed to really be front and center on decision making and, and actively participating. That's changed. Obviously I'm a resident, I have been a resident, I have been able to work directly in the Colorado company, but more importantly we built dixie brands, which is our national actually international with our Australian licensing agreement, our international branding and marketing company. And that's the company that both he and I now work for.

Speaker 1: Right. And, and so, you know, you've, you've done a good job of kind of explaining how your thinking has changed. Your residency has changed and things in general have changed as well because back, you know, uh, in 2013 and before it was mostly guys like a trip. Um, and now you're starting to see guys like you. And, and by that I mean, you know, a, you're a traditional business guy. Uh, and more and more folks like that are coming into the industry. Is it a, you know, this whole ball of wax of, you know, residency and you know, the change in, you know, what the goals are for the company that change in your thinking of the plant of why you're, you know. Okay. Kind of talking to me and, and doing a little bit more media stuff.

Speaker 4: Well, I think I always have been okay with that. Frankly, I've never been embarrassed or ashamed or afraid to be part of this. I've never have, it just wasn't where our roles. I'm a really defined themselves. I, I, I, I didn't have as many opportunities to do that and nor did I need to do that because that wasn't the role I was playing and you know, I'm happy to talk to you, but still the role that I play isn't the one that's in front of the or the camera that much. It's starting to become that because as we've got, as we're getting bigger, I should say even, you know, his role in my role continued to evolve so where he may do more fundraising and media and more of that kind of approach from a PR perspective. I'm doing more as it relates to legislative matters, so I'm being quite active now in both Colorado is now as well as other state political agendas and being part of that whole process. So I'm by default kind of getting out of the shadows and into the light, I guess

Speaker 1: there you go to t to use a phrase that we use, uh, in the industry. So as the company grows, let's talk about now, um, you know, you mentioned in Australia, talk about that a, that partnership, that's something that you guys announced now a few months ago, but uh, what's going on there?

Speaker 4: Oh, well it's exciting in that Australia announced the legalization of cannabis program and that is all, as you well know, just the nature of announcing something doesn't mean that you're suddenly in business. There's all kinds of legislative and regulatory hurdles to get through and it takes a long time. Um, people, you example that, that vote in a legalization regime and November elections won't see the first plant being grown probably until January of 2018. So these are long cycle decisions that are made. Australia is no different. We're excited though that, you know, virtually within a month after we announced our partnership in Australia to bring Dixie and our cbd line of products to Australia than parliament made a decision to approve and begin putting in a regime, I would say that will start making traction on that sometime later this year. Certainly from the hemp side, the hemp cbd based products and then eventually the full cannabis legalization. Right?

Speaker 1: Yeah. And you guys look, uh, look pretty smart in retrospect, uh, getting in there before the legislation. So as far as other regions, I mean, I know you're in California, just talk through where, where else you are in the world besides Colorado.

Speaker 4: Sure. So that's a, that's really first and foremost of what we do everyday. Right now we are, by the end of June, we will be in six states. That would be Colorado and California, as you've just mentioned, we have a licensed affiliate and an active development of a manufacturing and distribution facility in Arizona, Nevada, Oregon. And we will also be. I'm starting to build our manufacturing and distribution facility in Washington over the next 60 days. So dixie will be in six states, uh, by the end of June and then we'll take a 30 or 60 day breather and then we'll start focusing on the east coast and start making our plans to put some facilities out there. And uh, you don't have to tip your hat, of course if you, if you don't want to. But as far as these [inaudible], what are you looking at? What can you share with us?

Speaker 4: There's, there's some obvious states that, uh, you know, some smaller states that we are looking at and we have some relationships that we can explore. And of course, Florida has a, uh, started granting their licenses. Of course there's a lot of work to be done. They're, uh, they're, they're agreed to low dose products and CBD products are also being formed up. That industry really won't probably take off in, in earnest until next year I would say. But that's, you know, certainly a big opportunity in Florida once we can start leveraging that. Uh, there's other states that have legalized, but their framework and their marketplace just isn't conducive yet to, to us going into those states yet. New York is an example. There's just a, while they have licenses, they're the restrictive conditions on getting a patient card are such that you just can't really build an industry there.

Speaker 4: So we're going to have to sit back and wait and see right now that goes for Illinois, one of your old stomping grounds as well as far as patients and access. That's right. That's right. And it's, you know, it's disappointing. Uh, eventually they will come around. The reality is that, you know, most legislators that aren't comfortable, which is most aren't comfortable with a marijuana program, they, they make it very restrictive and they think that restriction is actually helping protect their citizens. Uh, the reality is it's not because they're citizens are already using marijuana, but they're being forced into a back alley or to buy them from, you know, drug dealers and cartels. They're not paying taxes on them. And those products are packaged properly, nor they tested if they would open that, uh, to be a more much more transparent model and allow people to participate in it.

Speaker 4: They would actually take the money out of the cartels coffers and they put them into the state's coffers and they would actually have a much cleaner and safe environment for their citizens. So, you know, they're, they're just a little backwards and eventually they'll, they'll figure that out. Yeah. Well, and that's not your opinion. That's exactly. And precisely what's happened here in Colorado. Well, it absolutely has and you can see it on, um, on many states. I mean the, the, the, the programs that are failing are the ones that have very restrictive qualifying conditions or have very onerous requirements to allow people to participate in the industry. So a company like Dixie is not going to invest in a state that doesn't have enough population to build a sustainable business. It's, it's not worth it to us from a business perspective. And we're not going to be able to effect any real change for that state until legislators at the top understand the cause and effect of legalization.

Speaker 1: So getting into now some prognostication. What, uh, what are your thoughts if we're kind of a, you know, a rolling down the hill to election day 2016 with a number of states on the ballot as far as adult use and you know, um, obviously the industry changing as we speak every day as it has been for the past 20 years, a little bit more quickly lately. What are you, what's your sense of 2017, 2018? What are we going to be looking at as far as legal cannabis?

Speaker 4: Well, I think our best days are ahead of us, um, but I still think there's a lot of danger out there for the industry. And so we all have to be very good stewards of, of the industry. We have to be responsible for putting the right products out, working hard with regulators and legislators to put good safe rules in place. You know, this is not going to be just a wide open free market economy for awhile and we shouldn't pretend that it is or it should be at this point. It shouldn't be, it should be something that's controlled and we can roll out properly and get the maximum benefit to each state to that, you know, is wisely able to adopt legislation. I think that you're going to see, you know, a handful of states come on board in November or before because there are several states that are trying to put a legislative action in place of a ballot initiative.

Speaker 4: And I think those are all, you know, very healthy and good things. Um, I would say that our biggest challenge in the industry other than our own, you know, poor decisions, uh, if there are those that some, some people do, um, our biggest challenge will be to prevent the FDA from coming in and taking over our industry. Uh, because that by that you mean rescheduling of course. Correct. Correct. Um, and there's a lot of call for rescheduling to schedule to that would be the best. The worst thing that could happen to the industry because it would put it directly under the purview and control of the FDA. I think you'd still end up being at a states rights in the states fights kind of an issue. Uh, but that would just muddy the waters. I think a rescheduling to three as an interim step, as a possibility. And, but certainly dea scheduling altogether would be the best approach. There you go. All

Speaker 1: right. So, uh, I don't think that there's a person listening that would disagree with you in any way on that last point.

Speaker 4: Yeah, I don't think so, but that is a point for your listeners and I know you've, you've talked about it to others before, you know, there was a misconception, uh, including, you know, the car's bill that was out that rescheduling schedule two would be a panacea and it isn't, it doesn't help banking, it doesn't help to 80. And it unfortunately, as I said, puts it into the domain of the FDA, which then puts it in domain a pharmaceutical, which means that patients will never get the product. And certainly from a recreational perspective, uh, you'll have no access

Speaker 1: and that's it. And it also doesn't protect consumers or patients from a, from a criminal, kind of a punishment if it's rescheduled as opposed to cookie scheduled. Correct? Correct. All right, so we're all on the same page. I guess it's time for the three final questions. Chuck, is this a game show you will win fabulous prizes, seth, you can win fabulous prizes. We'll see how you do show them what A. Yeah. No. So, uh, so the three final questions are, uh, I'll, I'll tell you what they are and then I'll ask you them in order. What has most surprised you in campus? What has most surprised you in life? And then finally on the soundtrack of Chuck Smith's life, what is one track? One song that's gotta be on there? So first things first, what, what has most surprised you in cannabis?

Speaker 4: What has most surprised me in cannabis? I think two things. I think the first was, and continues to be the incredible benefits at the plant provides. And again, I say this with full transparency that, you know, our path forward is full legalization of marijuana and full access by all consumers. That's certainly how we're going to build the company to its maximum value, but the testimonials that we get in and the feedback that I get directly from folks or again, through people that, that email or, or, or logos is a, just can bring it to your knees. Um, the stories have helped children are, helped help people with cancer, pain management issues, quality of life. That I think really surprised me and really changed my perspective on what we were trying to do here because, um, I just didn't have that, that basis. Fact I didn't have that, that evidence before I got into the industry. And so it just really solidified my desire to be part of it. So I think that's, uh, that's probably the most,

Speaker 1: yeah, it is a, it, it's remarkable to, you know, uh, see folks that get in kind of be a, have that epiphany, you know, come to that moment of enlightenment as far as, uh, as what the planet can do. Alright. So, so what has most surprised you in life? Chuck

Speaker 4: surprised me in life.

Speaker 4: Boy, that's the hardest question you've asked me today. And I even had about a minute to think about my answer. Um, you know, I think, I think what surprises me in and a pleasant way is the resilience of people, um, and the resilience of, of relationships. You know, my partner and I have been through a lot of, um, a lot of things together, uh, before the cannabis industry. We were building this real estate company right in the teeth of the downturn of the financial markets and the crash of the mortgage banking industry. And then as we were coming out of that, our resort, one of our resorts is right on the Gulf coast of Alabama and the BP oil spill occurred and that just devastated the area and as a result, devastated our business and through all that, you know, trip and I were able to, um, keep us sane head and know we drank probably more than we should have during that time.

Speaker 4: But, uh, um, but we had to resolve to be successful. We had resolved to pull it out and we had resolved to take care of the people that, you know, counted on us and Dixie has been no different, you know, we've stared into the abyss several times and have always just found a way to, to come out the other side and that goes for the people that were involved in, whether they're investors or our staff members, our family members. I just always am gratified at the, at the resolve that people have when they can pull together and work together.

Speaker 1: There you go. You mentioned a family members and uh, I, I guess third time's The charm here.

Speaker 4: Chunk it is. It is. Uh, actually met my wife Brenda. I'm on the beach and Alabama of all places. She is probably the key reason that I stayed there as long as I did in addition to the team that we built there at the real estate company. Uh, but it's been a blessing. She was two great girls that are, you know, I consider my own and they couldn't be more proud of me. And, and frankly, uh, it's kind of fun when I go to Tuscaloosa, come to University of Alabama, uh, every now and then I got a couple kids on, you know, in a bar pointing at me and whispering to each other, kind of like, hey, there's the weed guy.

Speaker 1: So that's pretty cool. Which there's no way that you could have imagined that, you know, maybe what 10 years ago, right? Yeah, there's a

Speaker 4: little, uh, there is little way that I could have ever thought that had been my life. But I'm, I'm, I'm proud and happy is, is. And, and I'm proud that they're happy. They're happy for me. So there you go.

Speaker 1: Alright. So final question might be the toughest one might be the easiest one on the soundtrack of Chuck Smith's life. What is one track one song that's got to be on there?

Speaker 4: Well, that's um, yeah, is probably hard because it depends on, I guess it depends on your state of mind, you know, at that, uh, at that point of time, um, I will tell you that, uh, that something that's made a profound effect on me just recently, and it probably is just because it's a, it's somewhat new, is the new remake of the sound of silence by district. If you've not heard it, you should. Um, it is, uh, it's an amazing song and it's amazing rendition. I always liked the song to begin with so many girlfriends Garfunkel, but, uh, this rendition is, uh, is just truly amazing.

Speaker 1: I have to go check that out. I mean, I know the, the original, the original is pretty good. I mean the original might be, you know, one of the greatest songs of all time, so it's got that going for it.

Speaker 4: It very much, uh, was one of the early, one of the greatest. But I will, uh, I will tell you to, uh, to listen to this youtube, youtube, this one when you get off the phone with me and that's what I'll do. That's what I'll do right now. How about that, chuck? I do that now. I'm going to, I'm going to flip. I'm gonna. Flip it around to you though in say that instead of me telling you about a song, I'm more of a reader. I do love music, but I'm more of a reader. I will tell you that, uh, a book that you and your listeners should, uh, should absolutely run out and get and read is called chasing the scream. Who's that by? And it's by a Johann Hari and it's a exposito on the, as, as he would call it the first and last days of the war on drugs.

Speaker 4: He's British, he's a British journalist. Um, and again, it's kind of a conservative, I have to admit on, on air. I'm a conservative Republican guy probably picked, I don't think anybody is surprised. Sorry for interrupting, but go on. Um, but, uh, this is probably one of the last books I would have picked up and somebody put it in my hands and I read it and I know I'm given out to people that I bought a whole case of them and I give them out to people to read. And the book really starts from day one on the war of drugs back in the early 19 hundreds and it goes all the way to present time. Uh, in fact, at the very end of the book is in the part of the, uh, interview process was with Barbara [inaudible] who's actually the head of the dor here in Colorado for a marijuana. Uh, so that's how current it is. Um, but it's, it's really worth I'm reading because it'll give you a perspective on why the war on drugs is a failure and why we need to start looking at different ways to approach it, whether that's through legalization or, um, you know, open treatment programs for people.

Speaker 1: That's it. And that is a, obviously a chasing the scream. Obviously it sounds like perfect fodder. Uh, if you, if you, uh, if you listen to this, so thank you for raising the game here. Chuck. No one else has suggested a book yet with the exception of Steve de Angelo suggesting his own book. Of course, now that's, that's a, that's obviously I'm a kid. Uh, he did not suggest that book. I do, but I would, I would give him a plug. Sure. He put the text into the right. It people should read it, Steve really well. And he's the godfather of cannabis, so we all have to pay respect to him for that, you know, I call him the ID of the industry. Well, the two kids,

Speaker 4: you are a, you are correct on that for sure.

Speaker 1: All right, Chuck Smith, thank you so much. Uh, and one of these days we'll, uh, we'll go ahead and have a handshake. You know, we see each other soon. So if it's a, but it's been a pleasure to talk to you and I really appreciate your thoughtful questions and appreciate the time. It's been fun. You got it. Thank you. All right. And there you have Chuck Smith,

Speaker 2: very much appreciate his time, very much. Appreciate your time. As always. Thank you so much for listening. One more thing to fill out that survey survey dot Libsyn Dot com economy would very much appreciate you doing that. No matter though, it just keep listening. That's all we're really asking.

Read the full transcript:

Become a member to access to webinars, quarterly reports, contributor columns, shows, excerpts, and complete podcast transcripts

This website stores cookies on your computer. These cookies are used to collect information about how you interact with our website and allow us to remember you. We use this information in order improve and customize your browsing experience and for analytics and metrics about our visitors both on this website and other media. To find out more about the cookies we use, see our Privacy Policy.
If you decline, your information won't be tracked when you visit this website. A single cookie will be used to remember your preference not to be tracked. Accept